Nonbalanced Growth in a Neoclassical Two-Sector Optimal Growth Model

Harutaka Takahashi

Chapter Chapter 14 in Sunspots and Non-Linear Dynamics, 2017, pp 339-359 from Springer

Abstract: Abstract For a neoclassical two-sector optimal growth model with Cobb-Douglas technologies and sector specific technical progress, we examine three properties: (i) each sector has an optimal path by which it will grow at a constant growth rate (an optimal constant growth path); (ii) the optimal constant growth paths satisfy saddle path stability; (iii) the elasticity of substitution between total labor and total capital is less than one along the optimal constant growth paths. These results, presented by Acemoglu and Guerrieri in their model with two intermediate good sectors and one final good sector, will give a firm theoretical base for establishing the Kaldor and Kuznets facts, and are proven herein for a neoclassical growth model.

Keywords: O14; O21; O24; O41 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/978-3-319-44076-7_14

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